UN urges Lebanon to form gov't of "competence," banks close

The United Nations urged Lebanon on Tuesday to form a competent new government that would be better placed to seek international aid, warning the country was in a critical financial and economic situation.

Lebanon's banks and schools were shut in a new wave of disruption as politicians struggled to agree on a new government to steer the country out of its worst economic crisis since the 1975-90 civil war.

Lebanon has been swept by weeks of protests fueled by anger at the ruling elite, including several former civil war militia leaders, widely perceived to have overseen rampant state corruption for decades.

The top U.N. official in Lebanon called for the urgent formation of a cabinet made up of people known "for their competence and integrity" that would be "trusted by the people." Such a government would be in "a better position to appeal for support from Lebanon’s international partners."

"The financial and economic situation is critical, and the government and other authorities cannot wait any longer to start addressing it," the U.N. Special Coordinator for Lebanon, Jan Kubis, said after meeting President Michel Aoun along with a group of foreign ambassadors.

The head of an importers' syndicate said restrictions on payments abroad were getting worse and further bank closures were not helping.

Aoun said formal consultations with MPs to nominate a new prime minister and form the cabinet would be held soon. Ahead of the formal discussions, politicians have been trying to agree on the composition of the government to replace caretaker Prime Minister Saad al-Hariri's outgoing cabinet.

Bank branches, which were closed for nearly half of October, shut again as staff went on strike over security fears, a union leader said, citing intimidation by customers demanding access to their money and by protesters who have gathered at banks.

The union, representing bank employees, called for the closure to continue on Wednesday.